Year End Giving—The Time to Plan is Now!

October 27, 2010 — William High

It’s October, but it is year end tax season.

I work with people all across the country. Each year, we see people set up donor advised funds in the month of December. In fact, we’ll see 50% of our activity take place in the month of December. While it’s a good thing that we have that kind of activity, it’s also a lesson for those planning now.

A few years back, I got a call from a donor who desperately wanted to set up a gift annuity. A few days later, we got a check for a million dollar annuity. In January, when we actually got to talk in detail, he admitted that he ran out of time, and he ultimately agreed that he should have chosen to use a charitable remainder trust which would have given him far more flexibility than the annuity.

Or consider the donor who called us with just a few days to go in the year and wanted to donate a $750,000 piece of real estate. He desperately needed the deduction, but as we looked at his situation, he had not owned the property long enough to get the maximum deduction. We simply ran out of time to help him give more and pay less tax.

Then there was the case of the woman who called us December 31 at 2pm. She needed to donate $40,000 before year end. She was frantic, until we explained she could set up her donor advised fund online and that if the check was postmarked that day she’d be fine. We solved her problem, but not without considerable angst to her.

I realize that some people cannot avoid it. But some know in advance that they’ll be taking their family on a Christmas vacation which will leave them little time to complete their tax work. The message is simple. Start now. Call your tax professional or your Christian community foundation and ask them how to maximize your giving while paying less tax. You’ll be grateful that you did and likewise be glad that you can give more.